Cooperative and Area Yield Insurance: A Theoretical Analysis
| dc.creator | Pincheira, Pablo | |
| dc.creator | Zeuli, Kimberly A. | |
| dc.date | 2017-04-01T16:27:19Z | |
| dc.date.accessioned | 2026-07-09T04:14:37Z | |
| dc.description | The purpose of this paper it to theoretically investigate the potential benefits that arise from a cooperative selling a government subsidized area-yield contract (i.e., the Group Risk Plan). The indemnities in area-yield contracts are triggered by a geographically determined yield (e.g, a country-wide yield average) instead of the more conventional individual actual production history. Therefore, an area-yield contract would be appropriate for managing the cooperative's systemic throughput risk. The cooperative would also capture some of the substantial government subsidies that are normally given to a private insurance company. Our primary finding is that farmers should be indifferent when considering the decisions to purchase area-yield insurance from a private company or encompass that business in their cooperative. We derive this result from the specific case of costless insurance and assume a Pareto Optimal contract. Under these assumptions, the government subsidies that the cooperative would hope to capture are simply a net deduction in their premiums. In other words, the benefit they capture from the subsidies in the same when they purchase the insurance from an outside firm or internally. | |
| dc.identifier | doi:10.22004/ag.econ.31822 | |
| dc.identifier | https://ageconsearch.umn.edu/record/31822/files/cp05pi01.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/31822 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/546991 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/31822 | |
| dc.title | Cooperative and Area Yield Insurance: A Theoretical Analysis | |
| dc.type | Text |